Question

Consider the following equations: Qd = 31 - 3P and Qs = 6 + 2P, where Qd = quantity demanded and Qs = quantity supplied, P = price
Demand Schedule
Price Quantity demanded
$250 1500
$200 2100
$150 2700

Answer 1

Solution: Demand equation ,$Q_d = 31 -3P$  ……………………..(1)

Supply equation, $Q_s = 6 + 2P$   ……………………..(2)

So, in equilibrium, $Q_d = Q_s$

                            or, $31 - 3P = 6 + 2P$

                            or, $5P = 25$

                            or, $P = 5$

 

So, $Q_d = Q_s = 31 – 15 = 16$ [As, P = 5]

So, $P = 5$ and $Q = 16$

 

 

Answer: So, price is $5 and quantity demanded is 16 unit.